Showing posts with label budgeting woes. Show all posts
Showing posts with label budgeting woes. Show all posts

Saturday, December 5, 2009

If you can afford X, you can afford X+Y

A popular argument in favor of the much-debated cosmetic surgery tax is that if you can afford to spend a ridiculous amount on personal upkeep, surely you can afford to spend a bit more for something worthwhile - in this case, health care for others. While the proposal itself does not bother me, the suggestion that if you can pay Amount A, you can also manage Amount A+B, does.

Leave aside for a moment the specific issue of cosmetic surgery. The question here is whether one's intent to pay Amount A should be taken to mean that one could just as well pay A+B, as though B does not change the price and thus the affordability of Unnecessary Item X. My argument is thus not that purchases should never be taxed, but that we should not pretend that taxes have no impact on the affordability of said purchases, even if such purchases could be classified as rich-people-nonsense. If part of the hope with this tax is to discourage consumption of something foolish, fair enough - I'll leave opposition to the more libertarian among us. But it seems the thinking is more, these spoiled, vain fools have money to spare.

Why does any of this matter for those of us not looking for nips and tucks? Because the principle of assuming X's affordability implies X+Y's affordability extends to realms that have nothing to do with taxes, Botox, or spreading the wealth to the less fortunate. Example: at every food store where a per-pound item is selected for you, you have to ask for less than you want to get the amount you're effectively asking for. But if you forget to do this, receive significantly more than you'd asked for, and complain, you will learn that this is just the amount the item comes in, or that it's tough to cut some item (fish, meat, cheese, etc.) to a particular weight (which is plausible in some situations, but does not excuse, say, extra olives, walnuts, etc., and is in any case often used as an excuse to oversell items well beyond the range of error). The store's message: 'If you can afford not to eat only prepackaged foods, you can afford an extra third of a pound of whatever it is you're having.' Only someone cheap would argue over a sliver, or order a quarter of a pound in the first place.

Leaving aside the question of whether cheapness should be penalized (and why wouldn't those on the selling end frown on frugality?), the implication here is that all consumers of X spend a set percentage of their wealth on X, and thus that only those with a particular economic status buy X in the first place. Which, whether X is a nose job or arugula, is false. Different people budget differently. Two people can be said to have a spare $400 to spend on nonsense, but one person's 'spare' $400 might come from his spare $4 million, while another's might be the result of months' worth of lentils in lentil sauce.

So, readers whose knowledge of economics extends beyond what's taught junior year of high school, does any of this make sense?